Pepe Escobar: China Rules the Rare Earth

Oil wars? Water wars? Sure – they will continue to define the geopolitics of the early 21st century. But in high-technology terms, nothing compares with the coming mineral wars. And the name of the game is rare earth.

Asia is the land of rare earth – the minerals that allowed the digital revolution to happen, and that are making green technology a reality. China controls no less than 95 per cent of the global production of rare earth.

The key player in this high-stakes game is Baotou Steel Rare Earth (Group) Hi-tech Co., from Inner Mongolia – the world’s largest producer of rare earth elements.

China has imposed export quotas on rare earth elements for three years – to boost its own high-tech industries. The Chinese master plan is to develop sophisticated smelting techniques for rare earth – instead of simply selling the raw product. When they get to that stage, Baotou Steel Rare Earth’s stocks in the Shanghai stock exchange will inevitably reach dizzying heights.

Greater China – including Taiwan – is the world’s top manufacturer and assembler of microchips, computers and network equipment, the soul of the internet.

So this whole process can be seen as yet another chapter in the Asian revitalisation of global capitalism – the most positive global development of the past three decades (and there have not been many).